PRICES of shophouses here have started to see resistance from the market, said a report from Knight Frank, which noted an increasing mismatch between sellers' high asking prices and prices that buyers are willing to pay.
Sellers who need to let go of their properties have thus had to lower their asking price, which has sent the prices of shophouses down.
The average transacted prices of freehold shophouses have taken a tumble, falling 10.8 per cent from $3,626 per sq ft in H2 2013 to $3,235 per sq ft in H1 2014.
The demand for shophouses among food and beverage (F&B), and retail businesses is also waning, pushing their prices down, said the report.
Prices of leasehold shophouses registered a steeper drop of 23 per cent, from $6,163 per sq ft in the second half of 2013 to $4,717 per sq ft in the first half of this year.
The sharper fall was due mainly to a high base in the preceding half-year, where a property on Duxton Hill went at $8,779 per sq ft and one on Peck Seah Street for $7,818 per sq ft.
On sellers' high price expectations, Knight Frank Singapore's executive director and head of commercial sales Mary Sai said they may see their property as scarce, especially in central locations where conserved shophouses are not easily available for sale.
There has been pressure on rental yields following H2 2013, mainly resulting from sellers' high price expectations.
Source: Business Times, 12 Jul 2014